Selling a house “as is” means that the seller is putting the house on the market without making any repairs or improvements to it. There are a number of reasons why people choose to sell a house as is. Perhaps the seller is in financial trouble or must relocate quickly to care for an ailing parent. Sometimes, a home is inherited by an out-of-state relative who doesn’t have the time or resources to maintain or renovate it. More often than not, they simply want to avoid making costly repairs.
Whatever the reasons may be, many real estate investors build their business models around helping homeowners in these kinds of situations to move out and get on with their lives. If you have your eyes set on an investment property listed for sale “as is” and want to make sure it is priced right, your offer should be based on these key factors:
- Comparable homes in the neighborhood
- The potential cost of repairs
For example, if comparable homes in the area are worth $250,000 and the cost of repair is around $30,000, a fair market value would be no more than $220,000. Though this math can be helpful in determining how much you may be willing to pay, a fair offer will also factor in whether the area is experiencing a seller’s market, the number of houses available for sale, the growth outlook for the area, and seasonal patterns in the market.
To ensure the purchase makes sense, investors should always elect to do a home inspection. While you will have to foot the bill for the inspection, it is well worth it as it may reveal any additional problems and can often help you negotiate down the final price.
Are you ready to invest in real estate and see the value it can provide? RLG would love to help you! Call us today to learn more.